Thursday, August 3 2006 17:33 Hrs (IST) - World Time -

New Delhi: India and Pakistan today (Aug 3, 2006) opposed Iran's demand for a higher price for gas it wants to export to the two countries through a seven billion dollar pipeline.

Oil secretaries of the two countries, who had an informal meeting last evening to devise a common strategy for the third round of tripartite talks on the pipeline beginning today, opposed Iran's propsoal, saying Tehran has to offer a price in line with international practices for long-term contract, sources said.

The last round of talks between oil secretaries of the three nations in Islamabad on May 22-23 had broken down after Iran sought a price linked to international crude oil.

Iran had forwarded a gas pricing formula wherein the gas price is linked to Brent crude oil with a fixed escalating cost component (10 per cent of Brent crude oil). The formula translates into a price of 7.2 dollars per million British thermal unit (mBtu), with a three per cent annual escalation.

The 3rd meeting of the tripartite working group on the IPI gas pipeline project is to be held today and tomorrow.

India wants to import 90 million standard cubic meters of gas per day from Iran through the 2,100-km long pipeline while Pakistan has indicated a requirement of up to 60 mmscmd.

Besides the Brent linkage, the Iranian formula does not prescribe a floor and ceiling for the gas price.

"New Delhi was opposed to both linkage with Brent crude oil and absence of floor and ceiling," a government official said.